Earlier this week, Airbnb CEO Brian Chesky announced what he described as "the most comprehensive update ever" to the company's service. It included more than 100 changes to the company's website, app, and policies.
But Chesky also revealed something about what these changes indicate for his company's target customers, and he summarized it beautifully in a single sentence:
"People aren't just traveling on Airbnb; they are now living on Airbnb."
That's a huge statement with serious potential implications for the travel industry.
Let's talk a little about how Airbnb discovered this key insight, and how it plans to capitalize on it.
A perfect storm.
As more and more companies adopt remote work, employees have new-found flexibility. According to Airbnb, this has resulted in a profound shift in consumer behavior, one that's manifested itself in three primary ways:
People are traveling any time. No longer tethered to a physical location for work or waiting for specific vacation time, customers have become more flexible in their travel dates.
People are traveling everywhere. Growth in travel to "low-density urban areas," like suburbs and small towns, has accelerated from 26 percent in 2018 to 35 percent so far this year.
People are staying longer. Nearly a quarter of the nights booked in Q1 this year were for "long-term stays," that is, stays of longer than 28 days.
In addition to the rise in remote work, there's another important factor that has come into play: Home prices are skyrocketing--not just in this country, but around the globe. In the U.S., the median home price surged more than 20 percent in April compared with figures from a year earlier. Similar surges have been noted abroad. (Experts cite various factors related to the pandemic, including rising costs of building materials, for the housing market's reaching a tipping point.)
Don't forget that Millennials were already resistant to home ownership, even before the pandemic. They, together with successive generations, helped propagate the sharing economy that gave birth to companies like Airbnb.
All of this has created a type of "perfect storm" that could produce a dramatic increase in demand for rentals--both short and long-term. And as more people get vaccinated and travel restrictions are lifted, Airbnb is poised to capitalize on it all.
"We believe this will be the biggest travel rebound in a century," said Chesky.
Optimism is sorely needed right now, but this is more than that. It's a brilliant example of how a company must always be alert to changing customer needs--and be quick to adapt to them.
So, how exactly does Airbnb plan to capitalize on these shifts?
For one, the company has made it easier for customers to be flexible with travel. A new feature called "I'm Flexible" allows renters to search for flexible dates, locations, and destinations.
Flexible Dates includes the ability to adjust not only the length of the stay, but also to search for any weekend, week, or month throughout the year. Airbnb has experimented with this feature, and says there have already been over a hundred million searches using Flexible Dates.
Flexible Matching is designed to help prevent the problem of "over-filtering." For example, if you filter locations by search parameters (like Wi-Fi, parking, or swimming pool), you may not get so many options to choose from. But flexible matching also shows you locations that are just outside of your search parameters--homes or rooms that are missing just one of your filter requirements, or are just outside of your search radius, or that cost just a little bit more than initially indicated.
Flexible Destinations allows people to search not only by location, but also by category--if you're interested in staying in a specific type of property, for example. Maybe you'd like to stay in a "tiny home," a treehouse, or even your own private island.
Other home categories include:
- Shipping containers
Imagine how these features would be useful for adventurous remote workers who want to spend a few months working in a cabin in one location, and then split time between a boat or a treehouse in another location.
Or, think of the less adventurous remote worker--who simply wants to try a long-term rental in a few different locations before deciding where to settle down.
Airbnb also anticipates more hosts joining its platform, so it's attempted to improve this side of the experience as well--by offering online classes or even the chance to chat one-to-one with a "Superhost," i.e., an experienced host who fits a series of requirements such as high overall rating, high message response rate, and low cancellation rate.
As the Covid-19 pandemic took hold, it was no surprise that the travel industry took a hit. A year ago, many wondered if Airbnb would even survive.
But instead of waiting the pandemic out, Airbnb paid attention to the big picture, as well as the customer. Yes, demand for travel dropped dramatically, but in the meantime, customers' needs also changed.
Fast-forward to today, and Airbnb is the first in the travel industry to respond to those specific needs.
If competitors want to survive, they'll need to follow Airbnb's lead.